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Here’s some innovative thinking courtesy of Bill Bonner at the Daily Reckoning blog.
He wonders if the US might be looking at its problems the wrong way round.
Rather than worrying about the fate of the dollar, its growing dept pile and the impact of all this on its influence on the global stage; perhaps the US should bite the bullet and retire from the role of global policeman and join forces with Europe instead…
As Bonner notes, think of the advantages of joining the euro:
Switch to the euro! The US should abandon the dollar and take up the euro as its currency. Sounds crazy? Un-American?
But think of the advantages. First, the euro is more colorful. It’s more fun to look at and use. Second, the euro is worth more than the dollar; you don’t have to carry around so much currency. Third, when you travel to Europe, you won’t have to convert your money. Fourth, Europe is the world’s largest economic unit. Having a currency in common with it will make it easier for the US to trade. Fifth, the Fed doesn’t control the value of the euro.
Instead, it is controlled by European bankers who, generally, are made of sterner stuff than Bernanke et al. Sixth, European bankers will not readily print euros just to help the US continue its program of reckless spending.
Seventh, unable to fiddle its own currency, and inflate away its debts, the US will have to cut spending. Eighth, the whiners, chiselers and something-for-nothing crowd in the US can moan all they want; Jean Claude Trichet won’t give a damn.
Regards, Bill Bonner
Naturally, that was largely a tongue in cheek suggestion. But the fact is those advocating a greater role of the SDR instead of the dollar, are pretty much arguing the same case.
Therefore, the idea of the US dropping the dollar is actually no more or less far-fetched than Greece pulling out of the euro.
Though, selling the idea to the average American, we presume, wouldn’t be all that easy…
Related links: Dollar to cede dominance as euro, yuan rise: study - AFP Will Strauss-Kahn’s Fall Lead to the Dollar’s Decline? – Curious Capitalist IMF blueprint for a global currency "“ yes really – FT Alphaville
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